Use the key financial data provided for Apple (September 2010 to September 2012) and Blackberry (March 2011 to March 2013) to calculate key profitability, activity, leverage, liquidity, and market ratios for the two companies. Then, answer the ChapterCase 5 case study Questions 1 through 3 for the time period for which you have the data (2010 through 2013).

Here are the questions for chapter case 5 #1-3 and chart information.

C CHAPTERCASE 5 presents a firm profitability analysis for Apple and BlackBerry in fiscal year 2012. Although the analysis presented therein allows us to answer the two key questions we set out to accomplish (accurately assess firm performance and compare it to competitors), keep in mind that this is a static analysis. It covers only one fiscal year. We basically take a snapshot of a moving target. To obtain a more complete picture, managers need to engage in a dynamic analysis, repeating this over a number of years. This will allow managers to identify when and where things went wrong (in the case for BlackBerry) and how to get back on track. Questions Exhibit 5.12 shows key financial data for Apple and BlackBerry for the three fiscal years 20102012. (Five years worth of data, 20082012, and related analysis are available online in Connect.) Using the financial ratios presented in the five tables in the How to Conduct a Case Analysis module (near the back of the text, after the MiniCases), do the following.

1. Calculate some key profitability, activity, leverage, liquidity, and market ratios for Apple and BlackBerry over time.

2. Conduct a dynamic firm profitability analysis over time (fiscal years 20082012) as shown in Exhibit 5.1. Can you find signs of performance differentials between these two firms that may have indicated problems at BlackBerry? When did BlackBerrys performance problems become apparent?

3. Make a recommendation to Thorsten Heins, the CEO of BlackBerry, about actions he could take to improve firm performance.

Key Financial Data for Apple and BlackBerry (fiscal years 20102012)

In millions of US$ (except for per share items):

Apple Y/E Sept. 2012 Apple Y/E Sept. 2011: Apple Sept. 2010: Blkbrry Mar. 2013 Blkbrry Mar. 2012 Blkbrry Mar. 2011

Total revenue 156,508 108,249 65,225 11,073 18,423 19,907

Cost of revenue, total 87,846 64,431 39,541 7,639 11,848 11,082

Gross profit 68,662 43,818 25,684 3,434 6,575 8,825

Selling/general/admin. 10,040 7,599 5,517 2,111 2,600 2,400

Total operating expense 13,421 10,028 7,299 4,669 5,078 4,189

Operating income 55,241 33,790 18,385 -1,235 1,497 4,636

Income before tax 55,763 34,205 18,540 -1,220 1,518 4,644

Income after tax 41,342 25,607 13,896 0 1,429 3,405

Net income 41,733 25,922 14,013 -646 1,164 3,411

Diluted weighted avg shrs 945 937 925 524 524 538

Dividends per shr com. stk 3 0 0 0 0 0

Diluted normalized EPS 44 28 15 -1 2 6

Cash and equivalents 10,746 9,815 11,261 1,549 1,527 1,791

Short-term investments 18,383 16,137 14,359 1,105 247 330

Cash and shrt-term invstmnt 29,129 25,952 25,620 2,654 1,774 2,121

Accounts revble, trade net 10,930 5,369 5,510 2,353 3,062 3,955

Total receivables, net 18,692 11,717 9,924 2,625 3,558 4,279

Total inventory 791 776 1,051 603 1,027 618

Total current assets 57,653 44,988 41,678 7,101 7,071 7,488

Property/plant/eqpmt, total-nt 15,452 7,777 4,768 2,395 2,733 2,504

Accmlted deprec., ttl Gdwill, net 1,135 896 741 0 304 508

Intangibles, net 4,224 3,536 342 3,448 3,286 1,798

Long-term investments 92,122 55,618 25,391 221 337 577

Other long-term assets, total 5,478 3,556 2,263

Total assets 176,064 116,371 75,183 13,165 13,731 12,875

Accounts payable 21,175 14,632 12,015 1,064 744 832

Accrued expenses 11,414 9,247 5,723 1,842 2,382 2,511

Other current liabilities, total 5,953 4,091 2,984 542 263 108

Total current liabilities 38,542 27,970 20,722 3,448 3,389 3,630

Total long-term debt 0 0 0 0 0 0

Total debt 0 0 0 0 0 0

Other liabilities, total 22,617 14,191 8,515 542 263 108

Total liabilities 57,854 39,756 27,392 3,705 3,631 3,937

Common stock, total 667 381 283 13 14 66

Additional paid-in capital 0 0 0 0 0 0

Retained earnings (accmltd defct) 101,289 62,841 37,169 7,267 7,913 6,749

Total equity 118,210 76,615 47,791 9,460 10,100 8,938

Total liabilities and shrhldrs eqty 176,064 116,371 75,183 13,165 13,731 12,875

Total common shares outstanding 939 929 916 2,431 2,446 2,359